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Cryptocurrency Fees: Everything You Need to Know

Cryptocurrency Fees: Everything You Need to Know

If you're new to cryptocurrency trading, you've likely noticed that fees come in many different forms and sizes. Even across a single trading platform, fees can vary considerably. In addition to exchange fees, most digital currencies also require transaction fees when moving fiat currency on or off of the exchange or digital assets between wallets.

To help you better understand these fees and how they may affect you, let's take a closer look at why these charges exist, and the different varieties you'll encounter when trading in digital currency.

Exchange Fees 101

The idea behind cryptocurrency trading fees is simple: In exchange for hosting a reliable trading platform and providing a range of customer services, exchanges assess a fee on buyers and sellers. The precise fee assessed depends on both the exchange and the type of trade that's being performed.

?To help illustrate the process, let's review some basic trading fees:

Transaction Fees Explained

In addition to exchange fees, cryptocurrency users typically pay transaction fees when sending coins or tokens across a network. Bitcoin mining fees are the most famous example of this process.

When one person sends Bitcoin to from one wallet to another, the transaction must be validated on the blockchain -- this is how we ensure that payments arrive in a safe and timely fashion.

In order to validate these transactions, "miners” compete to solve complex cryptographic puzzles by using computing power. A small transaction fee is paid to the winning miner who validates the transaction.

During periods of low network usage, Bitcoin mining fees are generally inexpensive -- just a few cents in some cases. Different cryptocurrencies have varying transaction fees, however, so it's important to pay close attention to both the asset type and the fee involved.

Bitvo's Competitive Fee Structure

With a highly-competitive and transparent 0.25-percent fixed fee structure on trades and one percent on withdrawals, Bitvo takes the guesswork out of digital asset trading. Our customers are assessed no fees for deposits of any type, which makes funding an account simple, easy and affordable.

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